Housing associations development spending down 18% | Housing Finance Network news

Housing associations development spending down 18%

The Regulator of Social Housing has published the results of its latest quarterly survey of registered providers’ financial health.

The report covers the period from 1 July 2020 to 30 September 2020 and shows that the sector "remains financially strong with access to sufficient finance."

And despite the results reflecting "some of the challenges" that have come from Covid-19, "the sector retains a good financial position overall."

The Regulator notes that the sector has "good access to finance" with total cash and undrawn facilities totalling £34.7bn at the end of the quarter. During the quarter, new facilities totalling £4.5bn were arranged by 44 providers, with £1.2bn of that relating to the COVID Corporate Financing Facility.

Development spending in the quarter increased from the previous quarter as restrictions on construction sites were removed, but is still 18% lower than in the same quarter of the previous year. Current asset sales in the quarter totalled £1.0 billion; 23% higher than the forecast.

The Covid-19 restrictions and associated increase in unemployment continues to affect arrears and void loss figures, though not to the extent anticipated in June.

Rent collection rates have increased to a level more consistent with normal seasonal trends, with underlying cashflow performance remaining strong.

Forecasts for the next 12 months indicate that performance and plans are beginning to return towards levels seen before the coronavirus pandemic. Forecast major repairs spend is now back in line with December 2019 projections and forecasts for both sales receipts and development expenditure have increased since June. While encouraging, these forecasts are clearly subject to change as the COVID situation develops.

Will Perry, Director of Strategy at RSH said: "The social housing sector continues to maintain a good financial position with forecasted improvement. Considerable challenges still remain, and providers will need to manage risk effectively to ensure that they can maintain services to tenants and plan and invest for the future."